The role of public procurement policy in driving industrial development

Given the large sums that are spent in public purchasing, the government of every state is itself an actor in the market, and often a relatively large actor. Government activities in the marketplace, the purchasing of goods and services or sometimes the marketing of the same, thereby impact and in some cases shape the market itself. Governments have therefore explored the possibility of using government purchases to promote not only redistribution among different sections of the population, but also industrial strategy, innovation technologies, or environmental protection through products or services that offer a reduced environmental impact – in an economy. Procurement policy is typically viewed as a legitimate tool to stimulate domestic production and consumption. By targeting contracts towards particular sectors or groups in society, the government could push forward policies to redistribute wealth, promote industrial strategies or ensure sustainable development. The following report sets out an overview of different industrial policy objectives commonly pursued through procurement contracts in India, Jamaica, South Africa, Brazil, Republic of Korea and the UK.